Australia’s Rest Super Said to Kick Off Endeavour Stake Sale

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Sources familiar with the situation report that Rest Super, an Australian pension fund, has begun to divest its minority stake in local energy distributor Endeavour Energy.

This week, the fund will send out information memoranda to potential buyers, as per those in the know who were willing to provide insights but not speak on the record due to needing to be authorised.

Rest Super is looking for a buyer offering up to A$1 billion ($694 million) in exchange for its 12.6% stake in the power company; they added that bidders should present their indicative offers within four weeks.

The pension fund has reportedly been looking for an exit from Endeavour Energy since 2019. The value of the stake back then was estimated at A$1.2 billion, but current market conditions mean that this figure is likely to be lower today. Rest Super declined to comment on the sale process.

Endeavour Energy provides electricity and gas to more than three million people in the greater Sydney. It is discounted by Australian regulators, who have indicated that it needs to upgrade its aging infrastructure and reduce losses from power theft. The company focuses on implementing digital meters, replacing old equipment, and introducing automated processes for faster turnaround times.

“This is a difficult time for energy companies in Australia, with increasing pressure from regulators to provide cost-effective services,” said one source close to the matter. “It will be interesting to see who emerges as the eventual buyer of Rest Super’s stake.”

If the sale goes through, it will be another chapter in Rest Super’s ongoing saga of divestments and acquisitions. The fund has sold its stakes in several companies in the past year, including QBE Insurance, Telstra Corporation and Fletcher Building Limited. It needs to be clarified what Rest Super plans to do with the proceeds from this sale.

“Regardless of who the buyer is, this sale could be a major win for Rest Super,” said another source. “It should give them more flexibility to invest in different assets and grow their portfolio.”

The divestment of Rest Super’s stake in Endeavour Energy comes when the Australian energy sector faces growing uncertainty due to several government reforms. It will be interesting to see how the sale process plays out and its impact on the industry as we advance.

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